A limited partnership agreement (LPA) is a legal document that outlines the operational and financial details of a limited partnership. In Alberta, Canada, all limited partnerships are subject to the Alberta Partnership Act, which sets out the requirements for forming and operating limited partnerships.

An LPA typically includes the names and roles of the general and limited partners, the amount and timing of capital contributions, the allocation of profits and losses, and the management responsibilities and decision-making authority of each partner.

One of the key advantages of a limited partnership is the limited liability protection it provides for the limited partners. Unlike the general partner, the limited partner’s liability is limited to the amount of their capital contribution and they are not personally liable for the partnership’s debts and obligations.

While LPAs are not required by law in Alberta, it is strongly recommended that limited partnerships have a written agreement to clearly outline the rights and obligations of each partner. This can help prevent misunderstandings and disputes down the road.

Some key considerations when drafting an LPA in Alberta include:

1. Naming the general and limited partners: The LPA should clearly identify who is responsible for managing the partnership (the general partner) and who is purely an investor (the limited partner).

2. Defining the roles and responsibilities of each partner: This includes outlining the management structure, the decision-making process, and the responsibilities of each partner.

3. Describing the capital contributions: The LPA should specify the amount and timing of the capital contributions from each partner.

4. Allocating profits and losses: The LPA should outline how profits and losses will be allocated between the general and limited partners.

5. Explaining the distribution of assets: The LPA should specify how the partnership assets will be distributed in the event of dissolution.

6. Outlining dispute resolution procedures: The LPA should include provisions for resolving disputes between partners, such as mediation or arbitration.

Overall, an LPA is a crucial document for any limited partnership in Alberta. It provides clarity and protection for both general and limited partners, and can help ensure a successful partnership for all involved.